McKinsey Data Show Banner Year for Asset Management

McKinsey reports that 2020 ended up being a record year for the asset management industry. In terms of overall AUM growth, 2020 emerged as the second-best year since the financial crisis, and total AUM reached an all-time high of $115 trillion for the global asset management industry. The report noted that mutual fund assets have been “buoyed by the tailwinds of market appreciation, and though organic growth has lagged for years, they remain the predominant vehicle in the market.” ETFs, collective investment trusts (CITs), and retail SMAs continue to gain market share, however. McKinsey noted that new assets flowing into ETFs hit a record of $508 billion in 2020, and by July 2021, the industry had already exceeded that record. CITs have gained over $1 trillion in assets, which McKinsey attributed to lower fees and customized allocations, and CITs’ suitability for target-date strategies in the defined contribution market. Retail SMAs also surpassed $1 trillion in assets for third-party-managed strategies, according to the report, helped by customization and tax alpha considerations. Other findings from the report: